Debt & Public Finance

The Freedom from Debt Coalition (FDC) launches an online petition to urge President Rodrigo Duterte and the members of the 17th Congress to repeal the Law on Automatic Appropriations for Debt Servicing and to conduct an Official Comprehensive Audit of all public debts.​“Filipino tax taxpayers'' money and all public funds should be spent for people''s needs and welfare such that provisioning for essential public services and immediate post-disaster rehabilitation for victims of calamities are assured and in place,” FDC stated in its letter through online petition platform Change.org.

According to the group, the Automatic Appropriations Law (AAL) forces the government to set aside a substantial portion of its annual budget for debt servicing before allocations are made for vital social and economic services. The law provision for Automatic Debt Servicing is contained in Section 26B, Book VI of Executive Order 292 or the 1987 Revised Administrative Code and was copied en toto from Section 31(B) of Presidential Decree 1177 or the Budget Reform Decree of 1977 of the late dictator, Ferdinand Marcos.​In the course of 30 years since 1986, the AAL has resulted in an average of 27.21 percent of annual public revenues automatically earmarked for interest payments, while principal amortization has eaten up an average of 67.61 of government''s borrowings.

FDC also calls for an immediate moratorium on repayments for questionable loans pending the results of the proposed Official Comprehensive Audit in order to stop further bleeding of public coffers for servicing of debts challenged as fraudulent, wasteful, and/or useless.

Earlier this year, FDC stated that out of the P214.5 billion scheduled debt servicing for foreign liabilities of the national government in 2016, P3.78 billion will go to interest and principal payments of five questionable loan-funded projects: Power Sector Development Program, Sixth Road (Tullahan), Pampanga Development Flood Control, Bohol Irrigation II, and Angat Water Supply Optimization.

In 2008 and 2011, FDC successfully lobbied the Congress for a moratorium on P25.9 billion interest payments for illegitimate debts and for an audit of all public debts. However, its efforts were blocked by the administrations of Gloria Macapagal-Arroyo and Benigno Aquino III.

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Freedom From Debt Coalition

The Freedom from Debt Coalition (FDC) – Philippines is a nationwide multi-sectoral, non-sectarian and pluralist coalition conducting policy advocacy work and campaigns to realize a common framework and agenda for economic development.